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This Week In Trade

Big Push For TPP, Bali; Services Offers; BSE Rule; Solar Anniversary

Posted: November 04, 2013

Posted: November 4, 2013

This week negotiators in both the U.S.-led Trans-Pacific Partnership (TPP) and at the World Trade Organization will be making a mad dash to find potential compromises, as officials in a separate plurilateral initiative on services trade mark the beginning of more detailed negotiations with the expected tabling of offers in Geneva.

The U.S. has been declaring that TPP is in the “end game,” despite the fact that many observers and U.S. Trade Representative Michael Froman acknowledge that significant issues remain outstanding. Starting today, negotiators in Santiago, Chile, will dive into one of them – disciplines on state-owned enterprises (SOEs) – with the hope of making some headway.

Those meetings last Nov. 4-7 and in advance, the American Iron and Steel Institute urged USTR to seek strong and enforceable SOE disciplines that include prohibiting the use of government subsidies.

Also this week is an intersessional in Washington on investment, which lasts Nov. 6-9. There are several sticking points in that chapter, including the scope of the investor-state dispute settlement (ISDS) mechanism when it comes to financial services, and Australia's resistance to including ISDS at all. These meetings and others will lead up to a TPP chief negotiators meeting in Salt Lake City being held Nov. 19-24 (Inside U.S. Trade, Nov. 1).

In Geneva, countries will be working against an informal deadline set by WTO Director-General Roberto Azevedo for the end of this week, by which he said they must hammer out a package of trade concessions for the Dec. 3-6 ministerial meeting in Bali, Indonesia.

With large gaps still remaining on elements of trade facilitation, agriculture and development, Azevedo has urged WTO members to involve capital-level officials where needed.

Separately at the WTO, a more limited number of countries are aiming to advance the negotiations in the plurilateral Trade In Services Agreement (TISA) talks, with market access offers expected to be submitted before an end-of-November deadline. Participants set the goal earlier this fall of making market access offers in November, after they agreed they had made sufficient progress on the actual text of the deal – although there are issues outstanding there as well (Inside U.S. Trade, Sept. 27).

USTR said in an announcement that U.S. negotiators will take part in the Nov. 4-9 TISA meetings in Geneva. China has also shown interest in the talks, although it is not a current participant. The U.S. is wary of Beijing coming to the table for fear it may end up taking the same kind of hard line in the separate negotiations to expand the tariff-cutting Information Technology Agreement (Inside U.S. Trade, Nov. 1).

As for the U.S.-EU free trade talks – the other major trade initiative being pursued by Washington – no meetings or discussions have been announced for this week. But USTR and the European Commission announced this morning that a second round of negotiations will be held in Brussels next week. The negotiations, which are scheduled from Nov. 11-15, will cover services, investment, energy and raw materials, and regulatory issues.

In parallel to those talks, the U.S. Department of Agriculture (USDA) late last week announced it would be publishing – at long last – a final rule that drop restrictions related to the EU's disease status and allow the European ranchers to ship beef to the U.S. This step was one of the unofficial obligations the U.S. took on as part of a series of trade-offs with the EU in the area of sanitary and phytosanitary rules, which has gone on in parallel to the negotiations as a “confidence-building” process.

On the trade remedies front, this week will mark the one-year anniversary of the U.S. imposing antidumping and countervailing duties on solar cells from China. The anniversary, on Nov. 7, closes a disappointing year for U.S. solar manufacturers who successfully petitioned for the trade case. It's not clear yet whether any side will ask for an administrative review of the trade remedy orders.

The domestic industry has complained that the scope of the orders is too narrow to limit Chinese exports from entering the U.S. market. And indeed, representatives of Chinese companies say their shipments have been largely unaffected because they have changed their production patterns. Scrutiny from the U.S. Commerce Department into those practices thus far has not turned up anything untoward, although it has been a headache for the firms (Inside U.S. Trade, Nov. 1).

In addition to all their work behind closed doors, USTR officials will be getting into the public eye quite a few times this week – mostly at a convening in Washington of the World Wine Trade Group. The group an “informal grouping of industry representatives from wine producing countries around the world,” according to its website. But public scrutiny of their remarks will be limited since all events are closed to press.

Acting Deputy USTR Wendy Cutler will deliver the opening keynote at the joint meeting of the APEC Wine Regulators’ Forum and World Wine Trade Group today (Nov. 4). On Nov. 7, Froman will speak at a reception hosted by the trade group while Sharon Bomer, assistant USTR for agricultural affairs and commodity policy, delivers an opening statement, according to an agency announcement.

Cutler will also speak on Nov. 6, at an open-press event on Japanese economic policy at the Peterson Institute for International Economics. Cutler oversees the entire TPP, but is also leading the parallel negotiations with Japan on automotive trade and other issues in her role as assistant U.S. trade representative for Japan, Korea and APEC affairs.